International oil prices have surged due to rising geopolitical tensions in the Middle East and uncertainty in global energy markets, thus raising concerns over fuel subsidy costs in Malaysia.
Government can sustain subsidy for up to two months
Prime Minister Anwar Ibrahim said the government is still able to maintain the RON95 petrol price at RM1.99 per litre for the time being, with the subsidy is expected to remain sustainable at least for the next one to two months.
Oil price volatility raises subsidy pressure
Crude oil prices in the international market recently went up as the prices exceeded the US$100 per barrel as geopolitical conflicts raise concerns over oil supply disruptions and shipping risks.
The increase in oil prices is putting pressure on countries offering subsidized prices for fuel, including Malaysia where the price of the RON95 petrol is heavily subsidized to reduce the burden of publics.
Government committed to managing cost of living
In the assembly of Ministry of Domestic Trade and Cost of Living, Anwar emphasized that stabilising prices and protecting household spending remain key priorities for the government.
He said the global oil prices are increasing, but the government has kept the price of RON95 at RM1.99 to avoid placing additional pressure on Malaysians.
Possible review if oil prices continue rising
However, while the government is keen on providing protection to consumers from any abrupt rise in prices, it is also acknowledged that the fuel prices will be determined based on the trends in the international market.
If the international market prices remain high, the government may be forced to consider the need to change the subsidy mechanism and the prices of the petrol.
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